Yahoo Finance Career Karma lands $40M to evolve into an edtech employee benefit
Career Karma raised its first millions off of a pitch that resonates with anyone who has ever googled coding bootcamps: a navigation tool for aspiring students and working professionals. Instead of creating its own curriculum, Career Karma helps students find the best programs for their price point and career goals.
The startup, founded in 2018 by Ruben Harris, Artur Meyster and Timur Meyster, is now growing its ambition to serve more than the bogged-down bootcamp student: over the past few months, Career Karma has seeded partnerships with employers, making it the latest consumer-focused edtech startup to go the employer benefit route as it scales. Now, Harris describes, his vision is that Career Karma will match employees and contractors to job training programs in the marketplace it has built over the past few years.
To execute on this stage of the business, Career Karma announced today that it has raised a $40 million Series B at an undisclosed valuation. The round was led by Top Tier Capital Partners, alongside GV (Google Ventures), Bronze Venture Fund, Stardust, Trousdale Ventures and Alumni Ventures Group. Existing investors also participated in the round, including SoftBank, Emerson Collective, Kapor Capital, Backstage, 4S Bay Partners and Y Combinator.
“Stage one was become the number one career advice service for the internet, stage two was become the world’s largest community of career transitioners and now phase three is to become the world’s largest staffing firm,” said Harris in an interview with TechCrunch.
Similar to Handshake and Guild Education, both valued as multibillion-dollar businesses, Career Karma is playing the middleman. As an employee benefit, Career Karma will be able to get students employer-paid tuition, and then re-skill and up-skill them into ideally more advanced job skills.
Employers will serve as a zero-cost acquisition channel that helps Career Karma work with lots of employees at scale -- a business its been in since launch.
“On the user side, we're able to identify the job training programs that they're interested in, the current skills that they have and the job that they want,” Harris said. “Eventually we’re going to have a really powerful database internally.”
Career Karma’s strategy shift means its business model will need a refresh as well. Previously, Career Karma charged a fee to bootcamps when it successfully placed a student in one of their programs. The fee was usually 10% of a placed-student’s tuition, which could range from $10,000 to $50,000, Harris says. While this strategy could appear to align incentives -- Career Karma only makes money when it successfully places a student inside a boot camp -- it could also pressure the platform to focus more on pace of placement than personalization of placement. The enterprise business won't necessarily bring the same sorts of pressures, since it will be built to serve career services, not just program matching.
Now, with an enterprise side, Harris said the company is hiring folks to help figure out the best new pricing strategy. Beyond the aforementioned companies, there’s precedent in this sort of pivot: last year, Codecademy raised the same sum in a Series D round to sell its services to the enterprise. A few weeks ago, the same company sold to Skillsoft in a $525 million deal.
